Gold is continuing its recent downturn as the Dollar strengthens in reaction to more negative debt news. Standard & Poor's downgraded Spain's credit outlook to negative in conjunction with discouraging news concerning the debt loads of Dubai and Greece. The discouraging developments in regards to government debt have delivered a negative psychological blow to investors, resulting in strength in both the Dollar and Yen as investors head for safety. Additionally, gold has been on an incredible run since breaking past its psychological $1000/oz barrier. Therefore profit taking in gold is not too surprising and could end up being a positive development for gold's uptrend should economic fundamentals print positively.
Investors will be receiving a key set of Aussie employment data during the Asia trading session tomorrow morning. Gold has been strongly correlated with the AUD/USD and EUR/USD, meaning investors should eye the Aussie's reaction to tomorrow morning's data releases. That being said, investors may also want to monitor the EUR/USD's interaction with our approaching uptrend lines along with November lows should they be tested. Any noteworthy technical setbacks in the EUR/USD or AUD/USD could result in further downward pressure in gold.
Technicaly speaking, gold still has multiple uptrend lines serving as technical cushions along with intraday and 12/08 lows. However, should our 1st and 2nd tier uptrend lines give way, the currency pair may opt to retest its psychological $1100/oz level. The $1100/ozlevel could prove to be a strong psychological support should it be tested. As for the topside, we're still not able to confidently place a downtrend line due to the lack of hisorical perspective. However, gold does face technical obstacles in the form of 12/08, 11/23, and 11/26 highs along with the psychological $1150/oz, $1175/oz and $1200/oz levels.
Present Price: $1138.10oz
Resistances: $1141.42/oz, $1145.50/oz, $1149.18/oz, $1153.67/oz, $1161.84/oz, $1165.11/oz
Supports: $1134.47/oz, $1129.98/oz, $1126.71/oz, $1123.03/oz, $1117.72/oz, $1113.22/oz
Psychological: $1100/oz, $1150/oz, $1175/oz, $1200/oz